E.U. Blocks Third Merger Try of London Stock Exchange and Deutsche Borse

With the impending event of Brexit, many uncertainties exist. The London Stock Exchange and Deutsche Borse, since 2000, have tried to merge three times. They hope to create a influential European stock market to compete with their American counterparts. On Wednesday, the European Commission blocked the deal with the leader of the commission, Margarethe Vestager citing concerns of a monopoly as reason for the block. Another problem with the merger was its planned location in London despite the uncertain trade relationship between Britain and the rest of the EU.
The announcement was highly anticipated but it did not come as a surprise. Critics of the decision say an opportunity to harness European economic power has been missed, but supporters of the decision point out uncertainty in the market over Great Britain's looming exit. The European Commission stands by its decision asserting that it would have created a monopoly in the clearing of bonds and other European fixed income products as well as removing horizontal competition for the clearing of single-stock equity derivatives. This decision will probably be the first in many decision made in light of Britain's exit from the European Union.

Source: NY Times, March 30, Chad Bray

Evidence that robots are winning the race for American jobs

I thought that this article was very interesting because the technology is increasing in the world but I never thought it would end up taking our jobs. With technology increasing it will be interesting to see if and how many years it takes till robots take over all the jobs. another thing that I am interested in is when robots do take over the majority of the jobs how will the economy respond to this due to a increase in unemployment because robots are doing all the work. the one thing that is interesting is everyone wants to have bigger and better technology but what this is doing is making the need for human labor to decrease. it will be interesting to see how long it takes until technology runs the majority of the market.

link: http://www.cnbc.com/2017/03/29/evidence-that-robots-are-winning-the-race-for-american-jobs.html

Trump climate change executive order

President Trump signed an executive order Tuesday that ends the Obama's administrations attempts to help the environment and that will help bring more coal jobs to America. Trump described it as an order that will get rid of job killing regulations. This act will undo the clean power plan, which is an initiative to lessen carbon emissions at coal powered power plants. This really hurts the US in trying to meet the benchmarks set at the Paris Climate Change Accord.

The White House believes that this will create more jobs and help the economy. However it is unclear if it will bring more jobs back because of the rise in demand of clean energy and the pressures on the coal industry.

http://www.cnn.com/2017/03/27/politics/trump-climate-change-executive-order/index.html

UK Introduces New Super-Secure One Pound Coin

The Royal Mint just recently introduced a new One Pound Coin that has been called the most secure coin in the world. The 12-sided coin includes high security features to foil counterfeits. It is non-symmetrical, and is bi-metallic.

"It's been designed to be fit for the future, using security features that aim to safeguard our currency, and currencies around the world, for years to come," said Adam Lawrence, chief executive of the Royal Mint.

This appears to be related to Brexit uncertainties. The coin has been released to 33 banks and post offices around the UK. It will be interesting to see if other countries follow the UK's lead throughout this time of uncertainty.

Link to Article

Free Exchange: The best policy

           This article details arguments for and against immigration, making a strong economic case for a continued flow of immigrants around the world. While it is true that those in lower-skilled jobs can suffer from immigration due to decreased wages, this fact misses the point that many of these workers are also subsequently pushed to specialize in other qualitatively better occupations. More significant, however, are the numerous economic benefits that come from sustained and higher levels of immigration. Among these is that immigration provides a urgently needed, yet not commonly discussed, solution to the demographic problem of an aging baby-boomer generation. Specifically, legal immigrants pay into Social Security thereby helping to secure retirement for U.S. citizens. Similarly, though a zero-sum argument is sometimes made that immigrants use healthcare services thereby excluding native-born individuals this analysis ignores several key facts. Namely, it is often migrants who end up staffing healthcare institutions like the NHS in Great Britain and, within the U.S., only legal immigrants are eligible for the healthcare benefits contained within the Affordable Care Act.
            Another compelling and frequently made argument is the so-called "Steve Jobs" case for immigration. This is the idea that, over time, migrants and their children invariably contribute to advances in the sciences, arts, and other realms due to the entrepreneurial spirit and energy they bring with them. In response, critics of immigration such as the Trump administration's Michael Anton make some version of the argument that immigrants cannot help but bring a "third-world" culture and values that are simply incompatible with the Western, liberal democratic values that have permitted our higher standards of living. Ultimately, this is nothing more than thinly-veiled prejudice masquerading as an actual economic argument given that such concerns were similarly raised about groups such as Catholics and Jews at various points in history. All of this is to say nothing of the fact that immigrants themselves almost always enjoy substantial benefits from immigration as the potential ceiling for income is vastly raised. By moving to a more developed country with the kinds of necessary infrastructure and institutions already in place, immigrants gain access to economic opportunities otherwise available. Importantly, as this article highlights, this move provides reciprocal benefits too that, in the end, raise the aggregate quality of life for everyone.


http://www.economist.com/news/finance-and-economics/21718873-whatever-politicians-say-world-needs-more-immigration-not-less

         

Congress Wasn't Ready to Repeal Obamacare

http://www.cnn.com/2017/03/25/politics/pence-health-care-speech/index.html

Despite the ongoing debate between the repeal of the Health Care system or not, this article makes me wonder how this road block is going to affect the timeline that Trump has promised on strengthening our economy.  The article states that the decrease in corporate taxes is next on the list after the doing away with Obamacare, however, I wonder if they are going to put the Health Care refinement on the back burner or if they are going to delay the rebuilding of the corporate tax structure.  Since Trump is already walking on eggshells with this country, his word is what can build his credibility, so this will be interesting  to see how he handles the pressure and the short term affects of our economy.

Democrats, Buoyed by G.O.P. Health Defeat, See No Need to Offer Hand

The Times article goes into detail about a worrying habit that the habit which is forming in the Democratic party. The United States has not been as unified as it could be, under the Obama administration the GOP fought against anything that the Democrats proposed. Now it seems that with Trump in power the Democrats are trying out the same tactics that the Republicans used. The combination of grassroots protests and political gridlock could make the next four years shockingly unproductive. The worst part about this is the success the Democrats have seen, not because it's a bad thing when a liberal agenda is in place, but because it means that politics are going to divide even further. "Being the party of no can pay its dividends." It's tough to see the political system turn into a childish argument but if the first few months are an indicator then it will be a long four years.

Republicans pull their health-care bill

Republicans pull their health-care bill

For about seven years Republicans have had strong resistance to the Affordable Care Act and have made efforts to change to a new healthcare policy.  With President Trump taking office in January, one of the first priorities was to fast-track a plan to do away with ACA and install a new healthcare bill.  Though many may criticize the current ACA, a concrete plan of replacing it has had difficulty materializing, and ultimately receiving wide spread support.  This statement has been supported to be true from many Republican not voting on the recent bill pushing for the American Health Care.  Speaker of the House Paul Ryan stated "We are going to be living with Obamacare for the foreseeable future," this attest to the uphill battle of repealing ACA and implementing a new healthcare care.    I am curious to hear others thoughts on this.




For full article, click here.

Economic Shocks are More Likely to be Lethal in America

This article discusses that Americans without college educations have suffered financially for decades. However, in more recent times, there has actually been an increase in the middle-aged white morality rate. This has been increasing since 1999. The mortality rate of middle-aged white Americans is much higher than other countries such as France, Britain, Australia, Canada, Sweden, and Germany. In every five-year cohort of whites born since the 1940s, deaths from drugs, suicides, and alcohol have increased respectively. This is a clear issue. Recent trends in the income of households headed by white 50-54-year-olds mirror their mortality rates. It is suspected that income decreases and economic shifts such as decreased manufacturing job opportunities have played a large role in this epidemic. This seems to be a very complex issue that will be difficult to solve. 

Article

Globalization is facing a 're-calibration,' says Dow Chemical chief

According to the article, because President Donald Trump began to implement his policy on bringing manufacturing back to America, the process of globalization is under adjustment which is also called "recalibration" by the Dow Chemical chief, Andrew Liveris. America has been a consumption economy after the World War II which means people can import almost anything and sell them in any retail environment or channel while there is actually no much incentives to invest. On the contrast, almost all the other economies are investment economies and even Europ has protections around the economy. Becuase America has paid much attention to the consumption, manufacturing based in America has lost the advantage of job creation. 

It would be interesting to see how the policies implemented by Trump can attract more investment. I'm looking forward to seeing what further policy would be issued to protect investment. Also, as America trying to get manufacturing back, this would definitely affect its import and the export of other countries. What is more, as the article mentioned, this adjustment might bring America to a level-playing field with other countries and probably, the America-centric would be the real future issue. 

http://www.cnbc.com/2017/03/20/china-development-forum-globalization-is-facing-a-re-calibration-says-dow-chemical-chief.html

The Progressive Case for Immigration

Just as the title suggests, this article discusses the affects of immigration. In reality there are many positives for have immigrants. There is a common belief that immigrants hurt the wage level for natives with a similar skill set. In fact, data suggests that natives will be pushed more to war a specialized skill and then will earn a higher wage. Additionally, in countries where there is an aging population, migrants tax payments help fund th natives' pensions. With more people joining a society, it also leads to new ideas and potentially new businesses in their new home country. Immigrating to a country like the US also gives a worker a boost in the value of the work they complete-no matter their occupation. Suddenly, workers earn 2.5 times more than they would have in their home country.

This article also discusses the arguments against two other arguments against immigration 1) the countries which they leave should industrialize and 2) "migrants might taint their new homes with a residue of the culture of their countries of origin". The author explains that the growth in China that we have seen to create an industrialized nation is unlikely to happen again. Especially since the cost of automated manufacturing is getting lower and lower. There have also been downward trends in the wages earned for manufactured labor. So, industrialization won't have the same positive effects that we've seen historically. Additionally, the idea that migrants' culture would taint the home culture is ridiculous, especially in a place like the United States which is founded on the "melting pot" or "salad bowl" of everyone's cultures coming together to create free flowing ideas and discussions.

https://www.economist.com/news/finance-and-economics/21718873-whatever-politicians-say-world-needs-more-immigration-not-less

Economists argue about the impact of Chinese imports on America

The article looks at the different arguments regarding the effects of the trade relationship with China. At first, it takes a look at the works of David Autor, David Dorn and Gordon Hanson who have found in their research that in the 17-year-period between 1997 and 2007, "a quarter of the loss in manufacturing jobs can be attributed to a surge in Chinese imports." 

Then the article looks into the counter argument put forth by Jonathon Rothwell where he contests the method of measurement and notes that splitting the time period shows that there is a significantly smaller effect on the labor force (which is flawed in itself since it is a smaller sample size). Rothwell also speaks about how there are so many factors like monetary policies and individual incomes that might have been different without this surge of imports and that there are too many other variables at play here to entirely blame Chinese imports for all these issues.

He also criticizes the aforementioned research for not taking into account the benefits that had come with this "China shock" noting the lower prices and the rise in American and Chinese consumer incomes. 

Although Rothwell's argument falls a little short when it comes to the numbers with the smaller sample size, there is something to be said about his concern about the variables and benefits not considered by the authors of the works being criticized. Sure, losing manufacturing jobs makes an economic dent but if on the other hand, US-based multinational corporations are building their profits off of this cheap labor then there are more than enough returns coming back to the US economy. Also given that American consumers are being able to buy cheap goods and services due to the cheap production means in China is certainly a benefit of this trade relationship that should not be completely ignored. The article notes how the excess of workers from the lost manufacturing jobs was not soaked up by other sectors but is should China really be blamed for that? If the US were to have better retraining programs or more government initiated employment facilities perhaps this number could have been reduced further. 

Rather than alienating people against globalization (with all of its comparative advantages and push for efficiency) the United States really needs to focus on either becoming more efficient (and providing goods at the same rate as China) or being better at helping the people who lose out in the bigger gains.

Egypt's economy shows signs of life

Last year it seemed that Egypt's government, lead by the authoritarian Abdel-Fattah al-Sisi, was losing control of the country. However, through a series of economic reforms such as allowing the Egyptian pound to float and lowering government subsidies for oil and electricity. Egypt has generally been weary of letting its currency float, instead opting fro a fixed pound that was too high for foreign investment. with this floating currency, Egypt has seen foreign investment boost in the last year due to this reform with $4 billion of investment in government bonds in January.

However, while these reforms have brought back some foreign investment, Egypt has continued to see a disturbing decline in its domestic market. Because of the drop in government subsidies the Egyptian people must now put more of their money into these kinds of expenditures rather than in firms that they otherwise would have been able to buy goods and services from. Buying goods and services for domestic consumers is also getting quite difficult because of the inflating currency due to the floating pound. For example, the juice and dairy producer, Juhayna, has seen its profits for the third quarter of 2016 drop by 34% from what it was at the same time the previous year.

Will the government's focus on foreign investment pay off before the "bitter medicine" becomes too hard to take for Egyptian firms and the Egyptian people?

http://www.economist.com/news/middle-east-and-africa/21718552-bitter-medicine-starting-work-egypts-economy-shows-signs-life

Work requirement for the poor, tax credit boost in the works for health plan, House Speaker Ryan says

I think that this article was an interesting read because healthcare is a big topic in the news and with this reform it could change alot! It will be interesting to see how the public takes some of these changes like the poor having to have a job in order to get the full medicade benefits! I also read that Trump is planing on raising the price that people are going to have to pay for Medicare which many people are struggling to pay the price now. There could be some backlash to these decisions and only time will tell. 

Link: http://www.cnbc.com/2017/03/19/us-republicans-working-on-medicaid-tax-credit-changes-paul-ryan-says.html

The Fed Acts. Workers in Mexico and Merchants in Malaysia Suffer.

            The peso is a currency that has been losing value as the Fed stated that it plans on raising interest rates this year. A shift in the global economy is affecting millions of people and as rates continue to rise, it adds momentum to a stream of money that has been leaving emerging markets and moving toward the US.  Foreign economies, which are trying to develop, are becoming weaker and currencies are falling.  It is almost as families are taking large pay cuts and can afford less and less and some cannot afford much to begin with.  People are starting to leave factories and go back to their home towns.

Most economist believe that the predicted rate increases will be far less than expected, but many emerging countries have created large reserves of dollars in order to protect themselves against a significant drop in their currencies.  One county that has already seen a significant impact is Turkey.  Their currency has dropped 25% against the dollar since May, and their reserves are low.  It will be interesting to see how this all works itself out.  Some countries are vulnerable at the moment and possible trade wars with the US need to be avoided at all costs.

Link:  https://www.nytimes.com/2017/03/16/business/federal-reserve-interest-rates-china-mexico.html?ref=business

Untold Suffering: Hundreds of Thousands of People Have Fled South Sudan for Uganda

In the beginning of the month, refugees from South Sudan flooded into the borders of Uganda as a civil war broke out between the president's, Salva Kiir, forces and the vice president's, Riek Machar, forces broke out. Of course, South Sudan has had issues since its independence in 2013, and peace agreements have been temporary bandages to deeper rooted conflict. The conflicts have driven toward ethnic cleansing; the government has been accused of "population engineering to redraw the country's ethnic map."

With war comes economic troubles. Famine was declared in February, inflation topped 50% each month (though it has lowered), and the currency collapsed. Refugee camps can no longer accommodate the huge influx of migrants, and the ability to continue the system teeters on failure. Uganda has been a unique exception and example for accepting refugees. Their success is attributed to their leaders' good attitude toward refugees. Families who arrive in refugee camps are given plots of land to farm, and services such as schooling, clinics, and markets.

For such a large acceptance rate of refugees, and not known for its wealth, Uganda sheds an interesting light on the "refugee crisis crisis" that has been affecting the world. Are European countries economically unable or unwilling to accept refugees? Has the mentality of inclusiveness and accommodation that Europe seemed to fight for really exist?

"Untold Suffering: Hundreds of Thousands of People Have Fled South Sudan for Uganda." The Economist. The Economist Newspaper, 17 March 2017.

China lashes out as South Korea puts an American anti-missile system in place

The U.S. Terminal High Altitude Area Defense system (THAAD) deployed to South Korea earlier this month and while the missile-muting shield is meant to keep North Korean nuclear ambitions in check it is also driving the Chinese to distraction.

Beijing sees THAAD as an escalation against their own missile forces and have argued and fought against the system’s deployment since the idea was broached as North Korea began slinging its rockets farther.

Consequently, the campaign against South Korea's Lotte Group and other South Korean companies is an example of how quickly political tides can shift in China. As of March 8, some 40 Lotte stores had been closed, often on spurious grounds such as alleged fire-code violations.

Lotte's troubles expanded to other South Korean firms on Thursday as China's tourism ministry instructed tour operators in Beijing to stop selling trips to South Korea from March 15. The order has since spread to other regions across the mainland, an official at Korea Tourism Organization said on Monday.

http://www.cnbc.com/2017/03/17/thaad-anti-missile-system-makes-china-lash-out-at-south-korea.html

If you're older and lower income, prepare to pay more under GOP health bill

http://money.cnn.com/2017/03/13/news/economy/cbo-premiums-republican-health-care-plan/index.html?iid=hp-stack-dom

The republicans proposal to replace Obamacare has faced harsh criticism and rightfully so. The GOP's health care act would potentially raise the premium for a 64 year old by around 25%. Refundable tax credits will not be as generous as they were under Obamacare and this could lead to older people feeling a significant economic difference.

It was estimated that a 64 year old making around $25,000 a year would pay $1,400 under Obamacare, but this number would spike to $14,000 under the new proposed bill. People believe that by 2019, these premiums will start to decline and by 2026, would be 10% lower than they are under the current system. It is believed that these numbers are misleading as they will lower the cost for younger folk, but would significantly effect older Americans. This new proposed healthcare would benefit people that do not qualify for Obamacare (earning $64,000+) as it would lower the premium from $14,600 to $13,500. Lastly, it will be interesting to see the effects of the proposed bill in the long run and whether or not it has a significant positive or negative impact on the economy.

As Uber Woos More Drivers, Taxis Hit Back

This article started with comparing the center serving drivers of New York's yellow taxis and the center serving the Uber drivers in the city. The center for Uber drivers is on the higher end comparing to the one for the yellow cab drivers. Uber, Lyft and other similar services offer consumers convenient and sometimes cheaper options. Since the demand for these ride-hailing services is increasingly high, the competition for drivers is intense. However, the series of fare cuts that Uber offers had drawn protests from drivers, who say it makes it difficult for them to make enough income. Uber was also sued by some drivers trying to get health insurance and other employee benefits.

Despite the conflicts happened between Uber and its drivers, Uber is still the winner over yellow cabs. The taxi companies are forced to embrace new ways to get its foot back on the ground. There comes a dilemma for the drivers: should they stay with a taxi industry that has been a fixture of New York life for over a century or should they join the ranks of the ride-hail apps that are "reshaping the city's transportation landscape"? The yellow-cab drivers are feeling more wanted because the industry has been trying hard to lure new workers and customers, which was completely different before Uber, Lyft existed. Yellow cab drivers did not get much help for the taxi center and were treated unfairly sometimes. Now since the taxi industry reformed some of its policy, the center had served more drivers than before. The drivers are walked through each step of the licensing and renewal process. They also receive free training classes which cost more than $150 before.

I personally would like to support taxi companies. But the features that Uber and Lyft offer make it impossible for me to prefer a taxi. These ride-hailing apps are just way more convenient and save me lots of waiting time trying to get an empty cab by the side of the street. And I feel safer riding Uber and Lyft because I can easily report a driver on my phone. When the taxi companies can offer similar features like Uber, I think I would use cabs again, because I respect their long history of serving customers.

Link to article: https://www.nytimes.com/2017/03/18/nyregion/nyc-taxi-center-uber.html?ref=business 

The world economy is picking up

It looks like the recovery rate of global economy has picked up its speed for past six months. Rapid economic growth is strong in different regions of the world especially in Asia, Europe and America with the same growth also observed in emerging markets such as Brazil and Europe. The rate is the highest in manufacturing sector of the economy. This global economic revival comes mainly from $300 billion spending of Chinese government in its second strongest economy in the world and adoption of expansionary policies.  These measures recused Chinese currency from rapid deflation and increased prices once again. However, there are doubts surrounding this optimistic global economic outlook. Debt recoveries of numerous nations including Europe and China are excruciatingly slow and banks are reluctant to write off old bad loans to make way for new loans. Regardless of these potential signs of drawback, it is always a welcoming sign to experience even a glimpse of positive economic growth.

http://www.economist.com/news/briefing/21718866-despite-anxieties-green-shoots-global-recovery-are-real-world-economy-picking-up

Japan could lead a resurgent TPP: Asian Trade Centre

           According to the article, even though America dropped out from the Tran-Pacific Partnership (TPP). As the executive director of the Asian Trade Centre, Deborah Kay Elms said, one purpose of the TPP is to push the member countries to open their markets, but for America which has already open a lot, what it can commit is actually very little. Also, becasue the relationship has been built up and some policy has been enacted, those countries can have good access with each other even though America is not there. Till now, most of the partnerships are built up under the lead of America and Japan can take the leadership but it's an unfamiliar role for it because it haven't been seen as a leader in this region. Elms thinks it would be a good chance for Japan and other Asian countries like China which is a partner of the Asean-led Regional Comprehensive Economic Partnership (RCEP), to learn to be a trade leader to fight against the raising protectionist sentiment. 

http://www.cnbc.com/2017/03/14/japan-could-lead-a-resurgent-tpp-asian-trade-centre.html

How Republicans want to change the health-insurance market

How Republicans want to change the health-insurance market

http://www.economist.com/blogs/economist-explains/2017/03/economist-explains-12

This is a really interesting article recently posted on Economist's website.  This discusses some of the potential downfalls of replacing the Affordable Care Act, along with pros and cons of the current ACA and the new healthcare plan that plans to replace it.  One of the populations most impacted by this is low income elderly folks.  I find this particularly disconcerting because many may not have the physical ability to make more income to help pay for the rise in their insurance premiums, if their plans change.

I am curious to hear what other have to share about this, as this is a very nuanced topic.

Sam Stull

The gender gap in science

This article from The Economist, talks about the major gender gap present in the field of science and scientific research. The article talked about how less women are present in the science industry especially in the physical science compared to healthcare industry where men dominate by 74%. I think that closing the gender gap in the economy in the field of science can have a positive impact on economic growth and development.

In another article I read earlier, an economist from the Women’s Policy Research predicts that there will be an economic stimulus effect from closing the gender gap in general could help the economy grow by at least 3 to 4 percentage points. Interestingly enough the labor force participation rate for the Unites States for women is significantly lower than in other countries such as Sweden. This gender gap is present due to lack of encouragement for women to join the labor force.

In another article I read earlier in the semester it talked about the pay differences that men and women receive in the US economy and how women are paid significantly lower than men for the same job which in turn leads to discouragement to joining the labor force.

Link http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-5

                                                                                                                                                          

U.S. Economy adds 235,000 jobs in Trump's First full month

http://money.cnn.com/2017/03/10/news/economy/february-jobs-report/index.html?iid=hp-stack-dom

The article explains how Donald Trump is fulfilling his promise to the American people to create 25 million jobs in 10 years.  Economists explain how unlikely it is that such a feat can be accomplished, however, the first full month of the Trump era shows to be on track to accomplish the goal.  He created quite a few jobs in the manufacturing sector along with the construction sector across the country.  Trump is pushing for better trade deals to even further increase the jobs in the U.S. which is exciting.  On top of the job creation, the country is also seeing better consumer and business confidence levels with increases in the wage levels.  I am anxious to see how things continue to improve moving forward.

E.P.A. Head Stacks Agency With Climate Change Skeptics

This article mentions Scott Pruitt, who ironically is now the leader of the Environment Protection Agency. Pruitt is a former Oklahoma attorney general who throughout his career has sued the agency he now leads. Most of the people assigned to these top positions in EPA are skeptical about climate change and they intent to cut back on the environmental regulations. They see some of these laws as harmful to business and therefore are looking for a way in which they can get rid of them. Gina McCarthy, who was the head of the EPA under Obama’s administration mentioned how it is good to have different opinions on how to meet the mission of the agency. However, she believe that Pruitt is not committed to the agency’s mission.

Douglas Ericksen, a current Washington state senator is being considered as the regional administrator of the E.P.A.’s Pacific Northwest office. Ericksen has been active in opposing a climate change state law that would tax carbon pollution. Unlike these new administrators, Obama had aimed to have better EPA regulations that reduced global warming and the usage of coal-fired plans. Pruitt is expected to mandate a higher fuel economy standards. This, however, will cut the EPA budget by about 24 percent, or $2 billion from $8 billion that we spend now.

I find it interesting how the new leaders of the EPA are opposed to laws that deregulate laws that protect our environment. Also, leaders that do not believe in climate change and believe that it is a good idea to cut spending from this program.  

Article: https://www.nytimes.com/2017/03/07/us/politics/scott-pruitt-environmental-protection-agency.html?ref=business&_r=0